Robots to the Rescue at Toys 'R' Us

Toys "R" Us is looking for back-end and front of store help from robots.

According to Bloomberg News, the toy store chain opened a new distribution center last month near Reno, NV that makes extensive use of robots to help fulfill online orders on the same day they are received.

Company CEO Jerry Storch said that a growing number of the chain's customers are placing orders online and via mobile devices. That, he said, means "we need to look at the online store and the brick-and-mortar stores the same."

Speaking of various sales channels for retailers, Toys "R" Us also announced that it will be looking to boost its top line sales this holiday season with a mini robot called My Keepon.

The product, which was originally developed as a form of therapy for autistic children, will be sold exclusively by Toys "R" Us beginning sometime in October.

The 10-inch robot is said to be a dancing fiend.

"When you see it rocking out, you just can't help but love it," Richard Barry, a vice-president at Toys "R" Us, told Bloomberg Businessweek.

In 2007, a YouTube video of Keepon dancing to Turn My Camera On by Spoon went viral with over 2.6 million plays.

According to Bloomberg Businessweek, My Keepon comes in touch and dance modes. In touch, it responds by turning, wiggling, popping up and down or sneezing. Its reactions vary depending on how it is touched. In dance, its moves vary according to the tempo of the song.

The robot's various responses are meant to keep it from becoming repetitive, as seen in other types of response toys. Toys "R" Us plans to retail My Keepon for under $50.

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Discussion Questions: How will robotics shape retailing in the near and longer term? What do you think will be the most interesting application of robotic technology in the retailing in the future?

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Instant Poll:

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Comments:

Robots in the supply chain -- yes. Robots as play things and novelties in the home -- yes. Robots for customer service -- no. Let's get the store associates out with the shoppers being perfectly human.

Bill Robinson, Principal Consultant, Bill Robinson Associates

Distribution centers have become increasingly automated in the last couple of decades and this will continue. Their primary function of storage and movement of product in a controlled environment make for good business cases for robotic technologies. If you haven't taken a "DC tour" in awhile, you will be surprised by the level of sophisticated automation.

The store, with its customer facing elements and less controlled environment, is more challenging for application of robotics, but given the impact of the labor cost on retail profitability, there will no doubt be activity here as well.

Robotics will help shape the models of retailing as keeping customer service and, more accurately, fulfillment, an immediate issue. This will raise logistics and full stream implementation at the retail level to the full response point that consumers expect when shopping. Why should an online consumer have to wait several days when an in-store consumer does not?

The president wants to create jobs and Toy "R" Us is eliminating them and showing how things can be done better and faster with robots. I wonder how many jobs this will do away with and what the government's reaction will be to this increased use of automation?

What will be the most innovate use of robots or AI? Getting rid of more employees, the objective of most retailers. One of my clients has built a true artificial intelligent call center program. Right now, it is as good as most live operators and, with some training, it will be as good as even some of the good ones in most situations. If you want to check it out, go to Mel Kleiman, President, Humetrics

In the future, stores will become pick-up locations. Automated forecasting, selection, and distribution applications will move merchandise from central distribution facilities to local stores.

The stores themselves will be like giant vending machines, automatically unloading the dropped trailer loads left at the back door and assembling customer orders for pick-up. Store inventory will be pre-allocated so that customers can be certain their purchases will be fulfilled. All the merchandising and marketing will be done from the retailer's website. When a customer completes their online order and indicates a pickup time, the automated store will stage the full order according to cold chain requirements. The final order will be assembled when the customer arrives at the store. The customer will drive up to a delivery window and unload the merchandise into their car. As soon as they pull out, their bank account will automatically be charged.

If the customer indicated online that they had a problem with a previous purchase, they will be able to leave the returned product. The return process requires additional human intervention to properly dispose of the returned merchandise.

So get your social networking presence up to speed now. Expect your customers to be shopping online from their offices, homes, and schools. Ad hoc orders will come from smartphones as the customer is approaching the store. Operating savings will be used to raise the grade or quality of merchandise in order to reduce return issues. Home delivery may become part of this, but the cold chain issues are still going to take a while to resolve because not everyone has a refrigerator and freezer that can be made accessible to the delivery person.

I know it seems far-fetched, but it makes so much sense and the potential for savings is so great, I think it is inevitable. The store is the last stop on the retail distribution channel. Think about the savings in operating costs if the store could be designed for efficient product distribution instead of its dual purpose today. With all the selling and merchandising relegated to the Internet, the stores can be optimized for their distribution role. Since robots would be putting away and selecting the merchandise, inventory levels will be tracked accurately. The online stores could be used to direct customers to alternatives when shortages or overages occur.